Gov. Signs Three Bills to Simplify Sales Tax Collections

(May 28) – Gov. John Hickenlooper signed three bills today to move Colorado closer to a uniform sales and use tax base. Colorado is currently the only state with different definitions of taxable goods and services. With 294 different taxing jurisdictions, Colorado taxpayers face many different combinations of tax rates and taxable items depending on where they purchase or sell products.

HB13-1272, sponsored by Majority Leader Dickey Lee Hullinghorst (D-Boulder), aligns the sales tax base for the Regional Transportation District and Scientific and Cultural Facilities District with the state sales tax base. The bill has no impact on state tax collections, and RTD and SCFD revenues are anticipated to increase by less than one percent.

“These different tax bases are confusing for taxpayers,” Rep. Hullinghorst said. “This bill simplifies the law for businesses and consumers and eases the burden on the vendors that collect sales and use taxes.”

HB13-1288, sponsored by Reps. Daniel Kagan (D-Cherry Hills Village) and Kathleen Conti (R-Littleton), requires the Department of Revenue to recommend to the General Assembly a proposal for a revenue-neutral uniform sales and use tax base. The proposal may include changes to tax exemptions and tax rates that have a net zero impact on the amount of taxes paid by consumers and businesses. The bill passed in both House and Senate with significant support from both sides of the aisle.

“We have an opportunity to simplify Colorado’s overly complex sales tax collection system without costing taxpayers a dime,” Rep. Kagan said. “This report will show how a less burdensome sales tax system could be structured.”

The report is due by the end of the year, and the legislature will have an opportunity to act on the recommendations of the department next session by either passing a bill or referring a measure to the voters.

HB13-1295, sponsored by Speaker Mark Ferrandino (D-Denver), simplifies the collection of sales taxes from out-of-state and online retailers to meet the requirements of the federal Marketplace Fairness Act. The provisions of HB 1295 would take effect upon passage of the federal legislation, which passed the US Senate on May 6 and is currently pending action by the US House of Representatives.

“HB-1295 puts our brick-and-mortar local businesses on equal competitive footing with online retailers,” Speaker Ferrandino said. “It’s good for Colorado’s local economies and for local economies across the country. I applaud the Senate for doing the right thing, and encourage the House to act as quickly as possible to send the Marketplace Fairness Act to the president’s desk.”

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